Rising incomes and a growing Chinese middle class have led to demand shifts toward more and better quality food. For instance, Chinese diets have changed to incorporate more meat, with average per capita meat consumption reaching 55 kilograms. Even so, that’s still just half of the average per capita meat consumption in America, implying there is plenty of room for Chinese demand to grow. At the same time, however, China’s arable land has been shrinking, closing in on the minimum 300 million acres that the government believes are needed to feed China’s population.

The growing appetites of Chinese consumers have led to investment opportunities in the agribusiness industry across most market segments, from soft commodities to seeds and food processing technologies. As the government pushes forward rural land reforms and moves toward modern, industrial-scale farming, China will need more technology and know-how, much of it residing in the United States. Moreover, rising concern over food safety in China has led companies to seek more vertical integration from the farm to logistics and sales. A maturing Chinese agribusiness market should present increasing opportunities for global investors across the value chain.

Inner Mongolia Yili Industrial Group

Company Overview

COMPANY DESCRIPTION

Yili is a producer and supplier of dairy products. The company’s key products range from liquid milk products for adults to milk powder and infant formula. The company has wide distribution networks in China and production facilities in New Zealand.

Global Presence

US FDI EXPERIENCE

Yili and Dairy Farmers of America Inc. co-invested $235 million to build a dairy ingredients plant in Kansas. The plant will begin operations at the end of 2017. In March 2017, Yili bid $850 million to buy Stonyfield Farm, an organic yogurt company in New Hampshire.

GLOBAL FDI EXPERIENCE

The company in 2013 acquired Oceania Dairy Ltd., a dairy processor in New Zealand for $480 million and made an additional $400 million investment to build two more plants.